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About World Bank Green Bonds

Climate change affects all of us. But it is expected to hit developing countries the hardest. Its potential effects on temperatures, precipitation patterns, sea levels, and frequency of weather-related disasters pose risks for agriculture, food, and water supplies. At stake are recent gains in the fight against poverty, hunger and disease, and the lives and livelihoods of people in developing countries.

Tackling this immense challenge must involve both mitigation—to avoid the unmanageable—and adaptation—to manage the unavoidable—all while maintaining a focus on its social dimensions.

Addressing climate change requires unprecedented global cooperation across borders. The World Bank Group is helping support developing countries and contributing to a global solution, while tailoring our approach to the differing needs of developing country partners. We are strengthening and building climate change partnerships with our member governments and a wide array of organizations.

In 2008, the World Bank launched the "Strategic Framework for Development and Climate Change" to help stimulate and coordinate public and private sector activity to combat climate change. The World Bank Green Bonds is an example of the kind of innovation the World Bank is trying to encourage within this framework.

The World Bank Green Bond raises funds from fixed income investors to support World Bank lending for eligible projects that seek to mitigate climate change or help affected people adapt to it. The product was designed in partnership with Skandinaviska Enskilda Banken (SEB) to respond to specific investor demand for a triple-A rated fixed income product that supports projects that address the climate challenge. Since 2008, the World Bank has now issued aroundUSD 8.5 billion equivalent in Green Bonds through 100 transactions in 18 currencies.

World Bank Green Bonds are an opportunity to invest in climate solutions through a high quality credit fixed income product.

The triple-A credit quality of the Green Bonds is the same as for any other World Bank bonds.

The World Bank’s Green Bond program supports the transition to low-carbon and climate resilient development and growth in client countries. >More

This includes both mitigation of and adaptation to climate change—all while observing the World Bank's safeguard policies for environmental and social issues.

Eligible projects supported by the Green Bond program are selected by World Bank environment specialists and meet defined World Bank eligibility criteria for low-carbon and climate resilient development. These criteria underwent an independent review by the Center for International Climate and Environmental Research at the University of Oslo (CICERO). CICERO concurred that, combined with the governance structure of the World Bank and safeguards for its projects, the World Bank eligibility criteria provide a sound basis for selecting climate-friendly projects.

Eligible projects supported by the Green Bond program are selected by World Bank environment specialists and meet defined World Bank eligibility criteria for low-carbon and climate resilient development. These criteria underwent an independent review by the Center for International Climate and Environmental Research at the University of Oslo (CICERO). CICERO concurred that, combined with the governance structure of the World Bank and safeguards for its projects, the World Bank eligibility criteria provide a sound basis for selecting climate-friendly projects. The full CICERO report is available here.

The below table provides some examples of mitigation projects and adaptation projects that meet the Green Bond eligibility criteria and thus are eligible to be supported by the World Bank’s Green Bond program (hereafter “Green Bond Projects”):

Examples of eligible mitigation projects are:

Solar and wind installations;

Funding for new technologies that permit significant reductions in greenhouse gas (GHG) emissions;

Rehabilitation of power plants and transmission facilities to reduce greenhouse gas emissions;

Greater efficiency in transportation, including fuel switching and mass transport;

II. Selecting projects that are eligible for financing by World Bank Green Bond process

World Bank green projects, like all World Bank projects, are designed to reduce poverty and improve local economies. But green projects specifically focus on tackling climate change issues that directly impact developing countries. >More

In addition to meeting the Green Bond eligibility criteria, these projects, like all World Bank projects, undergo a rigorous review and approval process to ensure that the projects meet client countries’ development priorities. The process includes early screening to identify potential environmental or social impacts and designing policies and concrete actions to mitigate any such impacts in accordance with the World Bank’s environmental and social safeguard policies. Every World Bank project is approved by its Board of Executive Directors – a resident Board with 25 chairs representing its member countries.

The lifecycle of a project financed by the World Bank (IBRD) follows six stages as shown in the graph below. World Bank- Green Bond Projects not only follow the same stages as other World Bank financed projects, including the due diligence and monitoring process throughout the project cycle, but in addition undergo three more steps as shown in the outer circle of the graph below. From the outset of the Green Bond Project cycle, environmental specialists get involved in order to identify projects that meet the Green Bond eligibility criteria. Go to http://www.worldbank.org/projectcycle for more information on the World Bank project cycle.

The Project Selection Criteria (see box above) are applied to screen projects resulting in a list of eligible mitigation and adaptation projects. Once approved, these projects disburse over several years during the implementation stage. Corresponding amounts are deducted on a quarterly basis from the account created to support the allocation of World Bank Green Bond proceeds to eligible projects.

III. Earmarking and allocating World Bank Green Bond proceeds

The graph below illustrates the Green Bond selection process including earmarking and allocating the World Bank’s Green Bond proceeds. > More

The proceeds are credited to a separate Green Cash Account and are invested in accordance with IBRD’s conservative liquidity policy until used for the support of the World Bank’s financing of eligible Green Bond Projects. Disbursement requests for eligible projects take place in accordance with IBRD’s established policies and procedures. Disbursements are often made over a period of several years, depending on when each project milestone is reached. As disbursements are made for Green Bond Projects, corresponding amounts from the Green Cash Account are allocated to the general lending pool on a quarterly basis.

IV. Monitoring and reporting on impact of supported project

The World Bank supervises the implementation of all projects it supports –including the Green Bond Projects. Client countries implement the development projects in accordance with the project loan agreement. > More

The supervision process comprises regular reports by the implementing government agency on project activities, including a mid-term review of project progress. The project's progress, outcomes and impacts are monitored by the government and the World Bank throughout the implementation phase in order to obtain data to evaluate and measure the ultimate effectiveness of the operation in terms of the objectives it was set to achieve. World Bank project information is available on the main World Bank website and includes documents with detailed information about the projects (e.g., Project Appraisal Documents). In addition, summaries and key impact indicators of the Green Bond Projects are provided on the World Bank’s Green Bond website with links to relevant documents with more detailed project information. Green Bond newsletters also provide highlights of these projects.

V. Ensuring compliance

Projects: Projects eligible under the Green Bond program comply with World Bank safeguards, procurement policies and other procedures addressing project integrity. > More

Compliance is assessed at the individual project level and through independent reviews of about a quarter of all projects. Project level reviews by the Bank’s specialists in environment, social aspects, financial management, and procurement ensure that adequate controls and management capacity are in place at the country/project level. In addition, the World Bank’s Independent Evaluation Group (IEG) assesses the performance of about one out of four projects, measuring outcomes against original objectives, sustainability of results and institutional development impact.

DISCLAIMER: This summary has been prepared by the World Bank (International Bank for Reconstruction and Development, IBRD) for information purposes only, and the World Bank makes no representation, warranty, or assurance of any kind, express or implied, as to the accuracy or completeness of any of the information contained herein. This summary includes references to and information relating to IBRD securities. Any such information is provided only for general informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy any IBRD securities. The securities mentioned herein may not be eligible for sale in certain jurisdictions or to certain persons.

World Bank Green Projects

World Bank Green Bonds support projects selected by World Bank environment and other sector specialists that meet specific criteria for development activities that help lower global carbon emissions. World Bank green projects, like all World Bank projects, are designed to reduce poverty and improve local economies. But they specifically focus on tackling climate change issues that directly impact developing countries.

Eligible Projects may include projects that target (a) mitigation of climate change including investments in low-carbon and clean technology programs, such as energy efficiency and renewable energy programs and projects, or (b) adaptation to climate change, including investments in climate-resilient growth.

The following list are “green” projects which are funded in whole or in part, by World Bank Green Bonds. These projects promote the transition to low-carbon and climate resilient growth in the recipient country across a range of sectors, as determined by IBRD.

Belarus - Biomass District Heating: The
project aims to replace the use of natural gas with a local renewable fuel
source (wood biomass: wood chips and wood wastes) supplied by certified
forestry companies in 13 district heating systems.>more

China - Beijing Rooftop Solar Photovoltaic Scale-Up: The “Sunshine Schools” Project will increase the share of clean energy in electricity consumption and demonstrate the viability of the renewable energy service company model. > more

China - Eco-Farming Project: This project supports cleaner, healthier farmyard environments, along with the reduction of greenhouse gas emissions through methane capture and combustion to generate energy. > more

China - Energy Efficiency Financing and Additional Financing: The project promotes financing through the Export-Import Bank of China and Hua Xia Bank for projects in medium and large-sized manufacturing companies. > more

China - Energy Efficiency Financing II: The project builds on the first Energy Efficiency Project with a US$100 million loan that will be provided to Minsheng Bank which, in turn, will on-lend to industrial enterprises. > more

China - Green Energy Schemes for Low-Carbon City in Shanghai: The project supports energy efficiency improvements such as lighting HVAC systems and insulation in commercial and government buildings. > more

China - Jiangxi Shihutang Navigation and Hydropower Complex Project: The Project supports improvements to the inland waterway channels and services for industrial shipping along the Gan River, while also reducing flooding. > more

China - Shandong Energy Efficiency: The project supports energy efficiency programs focusing on leasing and performance contracting in industries, such as paper, cement, motor manufacturing, and financing for a biomass. > more

China - Urumqi District Heating Project: The project supports construction of basic infrastructure to connect residents to district heating services with improved energy efficiency and environmental performance mainly in two districts. > more

India - Rampur Hydropower Project: The project aims to add renewable, low-carbon hydroelectric power to India’s northern electricity grid, and improve the effectiveness and environmental and social sustainability of hydropower. > more

Indonesia -Geothermal Clean Energy Investment: The project helps finance the confirmation of geothermal resources and construction of a steam field system and 2 powers plants with a total capacity of 150 MW. > more

Mexico - Efficient Lighting and Appliances: The project financed the Programa Luz Sustentable and the appliance exchange program which supported free exchange of efficient light bulbs and a loan/subsidy program for efficient appliances. > more

Mexico -Integrated Energy Services: The project supports use of renewable energy, mainly photovoltaic (solar) systems and some wind generators together with the regulatory and technical support needed to develop a sustainable market. > more

Montenegro - Energy Efficiency: This project would finance about 27-29 energy efficiency subprojects in hospitals and health care centers throughout the country, and at the Clinic Center Montenegro in Podgorica. > more

Morocco - Ouarzazate Concentrated Solar Power: This first project finances a solar plant using concentrated solar power technology that is part of Morocco's renewable energy scale-up initiative. > more

Peru - Second Rural Electrification: The project supports the provision of electricity services to rural areas by extension of conventional electricity grid and by financing solar photovoltaic systems for remote or dispersed populations. > more

Tunisia - Energy Efficiency: The project aims to scale up industrial energy efficiency and cogeneration investments by providing financing through two banks. > more

Turkey - Private Sector Renewable Energy and Energy Efficiency: The project finances renewable resources, such as small hydroelectric installations, and geothermal for heating and cooling purposes, and energy efficiency investments. > more

Turkey - Small & Medium Enterprises Energy Efficiency: The project aims to improve the efficiency of energy use in small and medium enterprises (SME), by scaling-up three commercial banks’ lending for energy efficiency investments. > more

Ukraine - District Heating Energy Efficiency: Working with 10 DH companies, the project rehabilitates, upgrades, and or replaces boiler houses, insulates piping, and introduces building level meters, among other energy efficiency investments. > more

Ukraine - Energy Efficiency Project: The project finances investments that have environmental and broader social benefits including modernization of obsolete facilities, installation of highly energy-efficient equipment and processes. > more

Uzbekistan - Advanced Electricity Metering: To support the government’s efforts to increase energy efficiency, the project finances the provision of advanced electricity metering and associated information, billing, and management systems for three regional distribution companies. > more

Brazil - Greening Rio de Janerio Urban Rail Transit: The system is expected to especially serve the poor populations who rely on public transportation by reducing travel time, in particular when switching from inefficient bus services.> more

Brazil - Sao Paolo State Sustainable Transport: The project improves transport and logistics, efficiency and safety by rehabilitating networks, and increasing the share of waterway transport. > more

China - Hubei Xiangyang Urban Transport: The project supports improvements in mobility and accessibility within and to the Xiangcheng District of Xiangyang in an integrated, efficient and safe manner. >more

China - Hajia Railway: The project includes construction of a 343 km-long, electrified, mixed-use (passengers and freight) railway line between Harbin and Jaimusi. >more

China - Heilongjiang Cold Weather Smart Public Transport: The project aims to improve service along targeted corridors to provide a more efficient, reliable, and comfortable bus service, particularly during extremely cold situations. >more

China - Jiaozuo Green Transport and Safety Improvement: To address these challenges, the project supports improvements in selected corridors to increase the quality of the public bus service, better regulate traffic. > more

China - Nanchang Urban Rail: The project finances construction and equipment for urban rail Line 2 (24 km and 21 stations), as well as technical assistance to improve ridership levels, increase land value around stations. >more

China - Qinghai Xining Urban Transport: The project aims to avoid this outcome by developing a model corridor along the Wusixiroad linking the city center to the western part of the city (XichuanNew Area). >more

China -Wuhan Second Urban Transport: The project supports improvements to the management of the public transport system. > more

China - Xinjiang Yining Urban Transport Improvement: The project improves the transport mobility in the central area of Yining City and provides transport accessibility in the selected new areas of the city, all in a safe, clean and efficient manner. > more

China - Yunnan Honghe Prefecture Diannan Center Urban Transport: The project supports improvements in the major transport corridors, including new infrastructure. > more

Colombia -National Urban Transit Program: The Colombian government and the World Bank are continuing to work together through the support to the National Urban Transit Program (NUTP). > more

India -Eastern Dedicated Freight Corridor: The project finances construction of a section of the Eastern Corridor with a double track electrified railway designed for freight only trains. > more

India -Sustainable Urban Transport: The project strengthens India’s national and local government capacity to manage climate friendly and sustainable urban transport focusing on public and non-motorized transport. > more

Brazil - Federal Integrated Water Sector: The project follows a long engagement in support of Brazil’s federal programs for water resources management.>more

Brazil - Integrated Solid Waste and Carbon Finance: The project supports the closing of open dumps, along with the construction and operation of environmentally safe landfills to reduce emissions. > more

China - Water Conservation II: The project supports objectives that increase water productivity and farmers’ agricultural production income, and improve sustainable agricultural water management in the Northern provinces. > more

Dominican Republic -Emergency Recovery & Disaster Management: The project is rebuilding the country’s national electricity, irrigation and water supply sectors. > more

India -Andhra Pradesh Water Sector Improvement: The project supports improvements in the irrigation service delivery on a sustainable basis to increase productivity of irrigated agriculture in the Nagarjuna Sagar Scheme (NSS). > more

Indonesia - Water Resources & Irrigation Management Program 2: This project focuses on developing capacity and infrastructure to improve river basin and irrigation management in selected areas of the country. > more

Morocco - Solid Waste Development Policy Loan: The project supports regulatory and institutional reforms to improve the operational, financial, environmental, and social sustainability of solid waste programs. > more

Tunisia - Second Water Sector Investment: The project promotes more efficient use of irrigation water and drinking water supply and increased capacity to plan for current and future water management challenges, including climate change. > more

Armenia - Second Community Agriculture Resource Management:The project helps targeted communities improve the productivity and sustainability of their pasture and livestock system thus improving food security and incomes. > more

China - Integrated Forestry Development: The project supports the development of additional forest cover and shelter belts in areas prone to wind and/or water erosion and in diversifying species and resilience in existing forest plantations. > more

China - Ningxia Desertification Control and Ecological Protection: The project supports the Ningxia Hui autonomous region, located in the lower reaches of the Yellow River, with investments to stabilize moving sands. > more

Indonesia - Coral Reef Rehabilitation and Management: The project supports Conservation Areas where fishing will be restricted while providing communities rights to other areas for sustainable fishing and helps them develop income generating activities that are compatible with healthy marine ecosystems. > more

Mexico - Forests and Climate Change: The project supports the improvement of Mexico's incentive programs for community forestry and forest-based environmental services. > more

Peru - National Agricultural Innovation Program: The project supports the strengthening of the national agriculture innovation program to invigorate adaptive research, extension projects, seed improvements, and skills development, among other measures. > more

Tunisia - Fourth Northwest Mountainous and Forested Areas Development: The project is designed to improve the socio-economic conditions of rural populations in the Northwest region through access to potable water. > more

China - Fujian Fishing Ports: The project supports construction and upgrading of fishing port facilities in six locations to provide shelters to protect fishing vessels from being lost or damaged during typhoons and seasonal storms. > more

Macedonia & Servia - South East Europe and Caucasus Catastrophe Risk Insurance Facility: To help increase access of homeowners, farmers, the enterprise sector, and government agencies to financial protection from losses caused by climate change and geological hazards. > more

Mexico - Climate Change Development Policy Loan: This policy loan supported government efforts as described in its 2007 National Climate Change Strategy. > more

Mexico - Modernization of the National Meteorological Service for Improved Climate Adaptation: The project supports improvements to the government’s observational infrastructure, data management and processing, and climate modeling and forecasting tools. > more

Russian Federation - Hydrometeorological Services Modernization: The project aims to enhance the national capacity to deliver reliable and timely weather, hydrological and climate information. > more

Timor-Leste - Road Climate Resilience Project: Building on a previous project targeting emergency repairs along key sections of the road, the project now covers the entire corridor. > more

Working Towards a Harmonized Framework for Impact Reporting

Based on green bond market participants' interest in impact reporting and the positive influence that higher transparency and comparability in this area may have for the green bond market, the World Bank collaborated with the African Development Bank (AfDB), the European Investment Bank (EIB), and the International Finance Corporation (IFC) to discuss green bond impact reporting.

The conclusions have been summarized and are available to download herein order to share information and support discussions with other issuers and investors and provide a reference for other green bond issuers as they set up their own impact reporting.

Dominican Republic - Emergency Recovery and Disaster Risk Management: In 2007, the Dominican Republic was hit by two powerful tropical storms that not only left thousands of families homeless and damaged crops. > more

Indonesia - Water Resources and Irrigation Management Program: Good water resources and irrigation management are essential for Indonesia's water and food security (the bulk of Indonesia’s grain crops are from irrigated areas). > more

Tunisia -Second Water Sector Investment: The project promotes efficiency improvements in irrigation schemes, more reliable water supply in rural areas and increased capacity to plan for current and future water management challenges, including climate change. > more

B. Agricultural and Ecological Resources

China - Integrated Forestry Development: Recognizing the important role of forests in supporting rural livelihoods and environmental services, China has increased its forest cover over the past two decades to 38% of the country's territory. > more

Tunisia - Fourth Northwest Mountainous and Forested Areas Development: Tunisia’s mountainous and forested areas of the Northwest cover 1.2 million hectares and support watersheds supplying 75% of the water consumed in the country. > more

C. Infrastructure, Energy and Built Environment

China - Huai River Basin Flood Management and Drainage Improvement: The Huai River Basin is the third largest river basin in China with a population of 165 million people in its watershed. > more

China - Xining Flood and Watershed Management: This project will improve the safety of people and protection of property from flood events and enhance sustainable utilization of land and water resources within Xining Municipality. > more

D. Other

Macedonia and Serbia - South East Europe and Caucasus Catastrophe Risk Insurance Facility: This project helps increase access of homeowners, farmers, enterprises, and government agencies to financial protection from losses caused by climate change and geological hazards in Macedonia and Serbia. > more

Mexico -Climate Change Development Policy Loan: In Mexico, changes in temperature and precipitation have been increasing flood, drought and hurricane frequencies. > more